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To Err Is Human. To Manage Error, Divine

6/8/2011-

by SIOP

New Book Errors in Organizations Now Available!
 
Whether they are high-profile, such as the 2007 incident in which actor Dennis Quaid’s twins were given overdoses of a blood thinner that nearly killed them; high-cost (consider the
loss of the $125 million Orbiter spacecraft due to human error); or simply mundane, yet potentially catastrophic, mistakes in data entry, errors in organizations happen.
 
To err is human—and there is no way to stop errors from occurring in organizations, at least not as long as human beings are a part of organizations, says SIOP Fellow David A. Hofmann, who, along with Fellow Michael Frese, recently edited the newest addition to the SIOP Organizational Frontiers series, Errors in Organizations (Routledge Academic, 2011).
 

Errors in Organizations is now available in the
SIOP Store!
 
Employees working in all organizations make errors everyday and often several times in the span of a minute, Hofmann and Frese explain in the book. Researchers, for example, have estimated that for some computer tasks, up to 50% of work time is spent on error recovery, and another study found that 10% of computer work time is spent handling and recovering from errors. That said, however, not all errors are negative, Hofmann noted.
 
“Many people assume that errors are always bad,” he added. “But there are a lot of positive examples of people learning from errors, so there are some positive consequences that can occur from errors as well.”
 
On the positive side, errors can lay the foundation for outcomes such as innovation and learning, Hofmann and Frese explain in the book. For example, both Edmondson (1996) and van Dyck, Frese, Baer, and Sonnentag (2005) found that a positive and constructive approach to errors is associated with organizational outcomes such as learning and performance.
 
However, on the negative side, many errors, large and small, lead to catastrophe, Hofmann said.
 
“In the first several pages of Chapter 1, we talk about the big kind of organizational failures that were caused at least in part by human error,” Hofmann explained. “You could talk about Challenger, you could talk about Chernobyl, you could talk about Deep Water. But then on a more mundane level there are all of these comparatively small errors that also affect organizations, such as accidentally deleting files, maintenance crews not resetting valves correctly after working, cockpit crew communication errors, and medication errors where medical professionals give the wrong dosage.”
 
Another interesting area where errors can be particularly pervasive and hard to root out is in all of the various spreadsheets that are used within organization, Hofmann added. In fact, it has been suggested that between 20% and 40% of all spreadsheets in use within organizations contain errors, Hofmann explained, noting examples from the book.
 
“As a case in point, Davies and Ikin (1987) found – after inspecting 19 spreadsheets being used in 10 different firms, dealing with issues such as project costing, payroll, loan schedules, and short-term money market investment analysis—that 25% contained serious errors. Along similar lines, Lawrence and Lee (2004) audited 30 spreadsheets used to justify the financing of projects. They found, on average, that 7% of the spreadsheets contained errors and that it took an average of six iterations before they were fully error free (see Panko, 2005).”
 
As innocuous as spreadsheet errors may sound compared to huge disasters like Deep Water, Hofmann warned they can be very destructive to organizations.
 
“If you make an error in a spreadsheet about the financial returns on a project, then you start investing the money, it can lead to pretty serious problems,” he said.
 
Two such errors described in the book were a mistaken $7 million funds transfer between divisions, and inconsistent currency conversions. In addition, consider the $125 million Orbiter spacecraft, he added. In this case, the post-incident investigation board determined the underlying reason for the loss was a failure to convert several calculations from English measures of force to newtons.
 
Hofmann also described an error documented in the book where an error in the command code of the Structured Query Language resulted in a loss of $58 million per year (based on the estimated time for error recovery).
 
Despite the importance and prevalence of errors in organizations, there has been no attempt within the field of industrial and organizational psychology to create a single source that summarizes what I-O psychologists know regarding errors in organizations and identifies future directions of research, Hofmann explained. Errors in Organizations answers that need and provides contributions by researchers who have conducted a considerable amount of research on error occurring in the work context.
 
“In this book, we have some of the leading thinkers in the field of I-O psychology and human error,” Hofmann explained. “What we’ve tried to do is a couple of things: we have some chapters that are focused on human error and that literature, then we have other chapters that are written by people who have knowledge on a specific topic, such as innovation, and they discuss the implications of human error for research and practice in that particular domain.”
 
Hofmann said the result is a book that isn’t meant to prevent all errors but rather to minimize the negative consequences of those errors that do occur.
 
“I think the uniqueness of this book is that for the most part when people talk about errors occurring in organizations they typically discuss how we are going to prevent them from occurring,” Hofmann noted. “While error prevention initiatives have clearly, in a lot of cases, been successful in reducing errors, as long as humans are involved in organizations, these efforts will not be able to prevent all the errors from occurring. So you have to think about what we can put in place to catch the errors after they occur. This book is more about how to manage errors and prevent the significant consequences that accrue because of them. This is about building resiliency into the organizations’ systems.”
 
Hofmann said students, academics and practitioners in a wide range of disciplines, such as industrial-organizational psychology, medicine, aviation, human factors, and systems engineering, will find this book of interest.
 
“This book is generally applicable to all industries,” he added. “Because errors occur in all industries.”
 
Dr. David Hofmann is area chair and professor of Organizational Behavior at the University of North Carolina at Chapel Hill’s Kenan-Flagler Business School. His research - focused on leadership, organizational climate, multi-level theory/methods, safety and human error - has appeared in Academy of Management Journal, Academy of Management Review, Journal of Applied Psychology, Journal of Management, Organizational Behavior and Human Decision Processes, and Personnel Psychology and other outlets. He teaches courses in organizational behavior and leadership and was formerly the associate dean for the full-time MBA program.
 
Hofmann’s research on leadership, safety and human error in organizations led to a corporate partnership with Behavioral Science Technologies where he helped develop a cultural assessment tool that has now been completed by over 200,000 employees in 1,000 companies (including all NASA employees after the Columbia accident). In 2006, he was awarded the American Psychological Association’s Decade of Behavior Research Award. The APA honored the practical application of his research investigating leadership issues in high-risk industries, and he presented his findings at a congressional briefing. Dr. Hofmann also received the Yoder-Heneman Research award from the Society of Human Resource Management and has been a Fulbright Senior Scholar. Currently, he is a member of the National Research Council / National Academy of Science’s committee investigating the BP Deepwater Horizon accident.
 
He earned his PhD in industrial and organizational psychology from Pennsylvania State University, a master's degree in industrial and organizational psychology from the University of Central Florida and a bachelor's degree in business administration from Furman University.
 
Dr. Michael Frese received his diploma and doctorate from the Free University of Berlin and Technical University Berlin, respectively, and holds a joint appointment at National University of Singapore Business School and Leuphana University of Lueneburg (Germany). Before that, he held a chair for work and organizational psychology at University of Giessen and also taught at London Business School.
 
Frese’s research spans a wide range of basic and applied topics within organizational behavior and work psychology. Most important are his longitudinal studies on psychological effects of unemployment, impact of stress at work, predictors of personal initiative, as well as psychological success factors of entrepreneurs. He is also known for his cross-national research on innovation. Most recently, he has done studies on cultural factors in organization and across nations, research that looks at psychological success factors in entrepreneurs in developing countries (Africa, Latin America, and Asia) and in Europe. Frese has authored more than 250 articles and was editor/author of more than 20 books and special issues. He is Germany’s most frequently cited work and organizational psychologist and business and management scientist and one of the most frequently cited Europeans. He has presented more than 25 invited keynote addresses.
 
Frese now serves as field editor for Journal of Business Venturing. He was president of the International Association of Applied Psychology, editor of the journal APPLIED PSYCHOLOGY: An International Review, coeditor of Psychologische Rundschau, editorial board member of various book series (Entrepreneurship Series in Germany, SIOP Frontiers book series, Organization and Management Series [Routledge]) and member of several boards of journals. He also serves as consultant and lecturer to the management of many companies (among others banks, technology firms, automobile, utilities, telecommunication, and computer industry) with more than 200 talks given and consulting jobs done.